Audit Report On the Oversight of Private Ferry Operators By The Department Of Transportation

The New York City Department of Transportation (DOT) is responsible for regulating public and private ferry operations originating or terminating within New York City. DOT issues all permits and license agreements. Based upon an agreement, DOT is responsible for collecting private ferry permit fees and the New York City Economic Development Corporation (EDC) is responsible for maintaining DOT piers and collecting private ferry landing fees and security deposits.

During Fiscal Year 2009, five private ferry operators provided private ferry service in New York City and DOT reported an average weekday ridership of 30,694 passengers on 20 private ferry routes. During this time, EDC reported collecting $852,059 in ferry-related revenue, using $741,863 in pier-related expenses, and receiving $59,644 for its administrative fee. As of June 30, 2009, EDC had a balance of $272,550 in the reserve fund.

The objectives of this audit were to determine whether DOT ensured that private ferry operators complied with the requirements of their permits and license agreements and that EDC provided a safe, clean, and well-maintained environment at DOT piers. The audit also determined whether DOT ensured that private ferry operators correctly paid their permit fees, and that EDC collected the landing fees and security deposits.

Audit Findings and Conclusions

DOT ensured that private ferry operators complied with the operational aspects of their permits and license agreements. In addition, the overall structural conditions and routine maintenance for all DOT piers appeared to generally be in good condition.

However, DOT’s controls over the billing and collection of fees from private ferry operators are inadequate. As a result, DOT was not able to ensure that operators correctly paid their permit fees, landing fees, and security deposits. In addition, staff in DOT’s Office of Private Ferries failed to forward checks to DOT’s Revenue Unit for deposit in a timely manner. Consequently, since Fiscal Year 2009, DOT failed to properly administer all 30 permits and 5 (29%) of 17 license agreements, resulting in $76,239 in fees and security deposits not being collected. The current collection practices increase the risk that non-collection, or misappropriation, of funds may occur and go undetected.

Audit Recommendations

To address these issues, we make nine recommendations, including that DOT should:

• Develop written policies and procedures to ensure that all fees are billed, collected, and deposited in a timely manner.
• Track all permits issued and reconcile fees collected with corresponding permits.
• Reconcile landing fees collected and reported by EDC with the corresponding license agreements.
• Reconcile security deposits collected and reported by EDC with the corresponding license agreements.